Apple Case 30: Taking a Bite out of the Competition

Apple Case 30: Taking a Bite Out of the Competition

General:

• Apple had the highest brand and repurchase loyalty of any computer manufacturer

• Low market share always

• Recognized as being innovative and considered to have a niche status

• iPod and iTunes examples of innovation

• Personal computer line to transition to Intel processors (BootCamp make run windows on mac machines)

• Apple’s personal computers are known for their stylish design, ease of use, seamless integration of peripherals, and high performance NEVER were able to capture a great market share partly because of the proliferation of Windows in the business consumer production.

Q1: Now that the switching costs are removed, could Apple gain market share and sustain profitability in the very competitive computer industry while simultaneously extending its reach into multimedia software and personal digital entertainment devices?

Q2: Introduction of iPhone: could Apple continue taking bites of competition on all fronts?

Company background

• Was formed by Steve Jobs (marketer) and Steve Wozniak (tech genius)

• Mission of empowering individual one person one computer with elegance of design and fierce attention to detail.

• First personal computer.

• In 1983, although not achieving commercial success, innovation was evident in the Lisa, the first GUI computer however it was priced high!!!!

• Macintosh introduced but with slow performance and limited compatible software

• Steve Jobs left

CEOs

• Sculley tried to take advantage of the Apple’s unique capabilities.

• Macintosh Plus introduced and grew Mac’s reputation with graphic artists and turned Apple into a worldwide brand.

• Apple still did design in-house and manufactured most if its own products. Macs were easy to use with seamless integration and reliable performance. This premium performance meant that Apple could charge a premium price.

• In 1991, the first portable computer was introduced. Sculley in 1992 secretly authorized Apple designers to create a way for the MAC OS to run on Intel processor

• Sculley was replaced by Spindler who continued to focus on innovation.

• Spindler allowed other companies to produce Mac clones which were cancelled by Jobs later.

• Later Amelio came and he intended to reposition Apple as a premium brand but sill stock price was low. He bought Next and brought Steve Jobs back again.

Steve Jobs’ Return

• One of the first strategies was to strengthen the relationships with third party software developers including Microsoft.

• In 1997 alliance with Microsoft to create a version of Microsoft Office for Mac

• In 1998, Apple introduced the iMac personal computer with translucent plastic case and was considered as a hallmark of industrial